A maker of online real estate marketplaces and data tools, CoStar Group runs well-known sites like CoStar, LoopNet, Apartments.com, Homes.com, and Matterport, which agents, brokers, and property managers use to list, find, and tour properties. Founder Andy Florance started the business in 1987 in the Washington, D.C. area after realizing commercial real estate had almost no organized data compared to stock markets. A fun quirk: the name is a mashup of "computerized" and "star," and the firm grew through big acquisitions like Matterport and the British site OnTheMarket.
CoStar returned to quarterly profit with $76M operating income as revenue rose 18% to $925M
swung to a $76M after a year of losses. rose 18% to $925M and rose to $0.14 as Residential Real Estate grew 33% on the Domain Acquisition and memberships, while operating expenses rose only 2%. The company is profitable again but holds $1.3B cash against a pending $800M acquisition and active buybacks.
Key takeaways
was $76M versus a $27M loss a year earlier and $3M in Q1 2026, as operating expenses rose just 2% to $652M with selling and marketing flat at $395M and G&A down 7% from a recovery on the Brown Judgment.
rose 18% to $925M, led by Residential Real Estate up 33% to $444M — $70M of that from the Domain Acquisition and the rest from more memberships, partly offset by lower average pricing.
Commercial Real Estate rose 8% to $481M, with up 9% on subscribers and price increases and up 14% on more listings, while Other CRE fell 5% on fewer transactions.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 18% to $925M driven by Residential Real Estate (+33%) and CoStar (+9%), while operating income swung to a $76M profit.
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Total grew 18% to $925M, with Residential Real Estate up 33% to $444M, largely from the Acquisition ($70M) and more memberships, partially offset by lower average pricing.
improved to 78.7%, up 0.6 points from Q1, as growth outpaced a 17% rise in cost of revenue that included higher from and Domain.
was $55M versus $6M a year earlier; the swing included $2M net with $9M Brown Judgment interest and lower other income.
Cash and equivalents were $1.3B after $589M in share repurchases, with $913M left under the and the $800M Zonda acquisition planned from cash on hand.
What changed
Q2 2026 Residential Real Estate rose 33% to $444M, sustaining the 32% Q1 increase against the Domain-inflated base flagged to watch.
Cash and equivalents were $1,266M, down from $1,215M in Q1 after $589M repurchases, against the $1,633M year-end 2025 balance and the flagged drawdown.
remained $6.7B with no indicated, consistent with the annual report's flagged condition risk after the acquisition wave.
built to 8.2% from 0.3% in Q1, moving toward the 5.5% Q4 2025 level flagged as the watch point.
Selling and marketing stayed at $395M (about 43% of ), below the ~50% ratio flagged across 2025 as brand advertising matured.
The Zonda acquisition is newly flagged in this 10-Q as a risk factor with regulatory, integration, and cost exposure not carried in the prior annual report.
What to watch
Q3 2026 Residential Real Estate to see if the 33% Q2 increase sustains against the larger Domain base.
Closing of the $800M Zonda acquisition and its effect on the $1.3B cash balance and remaining $913M .
Next test on the $6.7B given stated condition risk.
Q3 2026 to see if the 8.2% Q2 figure holds as Zonda integration costs land.
Commercial Real Estate increased 8% to $481M, led by (+9% on subscriber growth and price increases) and (+14% on more listings), while Other CRE fell 5% due to fewer transactions.
improved to 79% as growth outpaced a 17% rise in cost of revenue, which included higher from and acquisitions and increased web hosting costs.
Operating expenses rose only 2% to $652M; selling and marketing was flat at $395M as -related costs were offset by lower brand advertising and commissions, while G&A fell 7% due to a recovery from the Brown Judgment.
surged to $55M from $6M, helped by the operating turnaround and despite a swing to $2M net (including $9M Brown Judgment interest) and lower other income.
Cash and equivalents stood at $1.3B after $589M in share repurchases; the company expects to fund the $800M Zonda acquisition with cash on hand and has $913M remaining under its program.
Quantitative and Qualitative Disclosures About Market Risk
Foreign currency exposure is the primary market risk, with a 10% USD move impacting quarterly revenue by ~$13M; interest rate and other risks are deemed immaterial.
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Approximately 14% of is denominated in foreign currencies, primarily British Pound, Canadian Dollar, Australian Dollar, and Euro.
A hypothetical 10% strengthening of the U.S. dollar would have decreased by $13 million for the quarter and $25 million for the six months ended June 30, 2026.
A hypothetical 10% weakening of the U.S. dollar would have increased by $13 million for the quarter and $25 million for the six months ended June 30, 2026.
The company does not hedge foreign currency exposure but notes a $138 million gain in from translation adjustments as of June 30, 2026.
Interest rate risk is considered immaterial: $1.3 billion in cash equivalents is diversified, and the $1.1 billion had no outstanding borrowings as of June 30, 2026.
and of $6.7 billion are monitored for , but no current impairment is indicated.
Currently, and from time to time, we are involved in litigation incidental to the conduct of our business. We are not currently a party to any lawsuit or proceeding that, in the opinion of our management based on consultations with legal counsel, is likely to have a material adv…
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Currently, and from time to time, we are involved in litigation incidental to the conduct of our business. We are not currently a party to any lawsuit or proceeding that, in the opinion of our management based on consultations with legal counsel, is likely to have a material adverse effect on our financial position or results of operations. See Note 11 of the Notes to the Condensed Consolidated Financial Statements included in Part I of this Report for further discussion.